Schneiderman's office accuses Trump of defrauding more than 5,000 people nationwide through his "Trump University" that offered free seminars to help them get rich by teaching real estate-investing techniques used by the billionaire developer-turned-reality TV star.

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Schneiderman, who filed the lawsuit Saturday in Manhattan state Supreme Court, accused Trump of engaging in a "bait and switch."

"Trading on his celebrity status, Mr. Trump personally appeared in advertisements making false promises to convince people to spend tens of thousands of dollars they couldn't afford for lessons they never got," Schneiderman said. "No one, no matter how rich or famous they are, has a right to scam hardworking New Yorkers. Anyone who does should expect to be held accountable."

Schneiderman, in the lawsuit, says Trump University ran ads across the country with Trump's photo and signature offering the free workshops.

But the workshops instead misled consumers by promising instructors hand-picked by Trump who, in reality, were not, Schneiderman alleges.

In reality, the free seminars were often nothing more than sell jobs to get people to sign up for a $1,495, three-day seminar that also fell far short of such promises as helping people learn how to get access to private sources of financing to insinuations that Trump would appear, the suit alleges.

Trump University was put on notice by the state Education Department as far back as 2005 that it was not licensed to call itself a university and changed its name to the Trump Entrepreneur Institute in 2010. (BEBETO MATTHEWS/ASSOCIATED PRESS)

And it didn't stop there, the lawsuit charges. Those who paid for the three-day seminar were told it would not be enough to make them successful real estate investors.

They were encouraged to sign up for a "Trump elite mentorship program" that cost anywhere from $10,000 to $35,000 per person.

All the while, the organization billed itself as Trump University, even though it was put on notice by the state Education Department as far back as 2005 that it was not licensed to call itself a university.

Schneiderman says that. “no one, no matter how rich or famous they are, has a right to scam hardworking New Yorkers. Anyone who does should expect to be held accountable.” (Mike Groll/AP)

Trump University officially became the Trump Entrepreneur Institute in 2010.

Schneiderman's office says "dozens and dozens" of complaints have been filed.

The lawsuit names Trump as chairman of the institute and Michael Sexton as the organization's former president.

“Trading on his celebrity status, Mr. Trump personally appeared in advertisements making false promises to convince people to spend tens of thousands of dollars they couldn’t afford for lessons they never got,” Schneiderman said. (Heidi Gutman/AP)

It alleges "persistent fraud" and seeks to repay all 5,000 customers. It also seeks additional penalties and fines.

Trump dismissed Schneiderman's allegations, claiming on a website that 98% of his students are satisfied.